WINZ Bond

[blurt]

What are people's experience with WINZ bonds? I have prospective tenants for a Mt Wellington flat that say that WINZ will give them a loan for the bond. Should this ring warning bells or do the WINZ bond loans work out OK? Does anyone know if I'm likely to get the bond before they move in, in two weeks?

[blurt]

Sound like excellent advice, I'll do that once the credit checks etc. come up OK. Thanks.

[flyernzl]

WINZ bonds do work out. I have several.

Basically the Government funds the tenants bond to you, the Landlord.
You send the bond through to the DBH.
So the Government gets its money back in 23 days, and you have housed a low-income tenant for them.

Everybody wins.

[Glenn]

I get several credit notes from winz every week.
WRITE this BIG note to yourself.
The day the advance is made it will appear in your bank that night.

A lot of prospective tenants, perhaps like yours, will say it has all been approved when in fact it has not.
Do not sign a tenancy agreement as the process to get that winz money. The RTA says you can not write conditional tenancy agreements. Yes sure I know lots of landlords do write them. But the issue is if the money does not come what do you think you will do. Remember the Tenancy Adjudicators rightfully know the RTA inside out. They will say the tenants have signed their rights away and make the tenancy agreement valid even though there is no bond.

The correct process is to write an invitation (not and offer) to rent conditional upon payment of the bond and rent.

[flyernzl]

Agreed, Glenn.

[Perry]

The correct process is to write an invitation (not an offer) to rent conditional upon payment of the bond and rent.

Wouldn't an invitation be the same as a conditional offer of tenancy?
Certainly not a TA, but something that could lead to a tenancy if
the conditions are all complied with, including a credit check.

[Glenn]

Wouldn't an invitation be the same as a conditional offer of tenancy?
Certainly not a TA, but something that could lead to a tenancy if
the conditions are all complied with, including a credit check.

Ha Ha

I just got a private message from Keys asking the same thing.

Contracts is what it is all about.
What is a contract. It is an offer and acceptance and that makes a binding contract.

A for sale sign is not an offer it is an "invitation to treat".

So any form you create needs to be and INVITATION to treat style rather than innocently fall into a trap of creating a contract.

Many years ago I had two applicants that got one of my original "OFFER" forms. Two issued and two within minutes with two different case workers got credit notes. Obviously only one moved into the rotten house and the disgruntled missed out one took me to the tribunal and won.

As my tormentors at the court said to me with a smile as I paid the money across the counter. "you do not often lose" .

So I changed the name of my form.
I think I have said more than once on the forum.
Landlords can not expect to win every point in every case.
You just have to win way more than you lose.
You do that by making the pendulum of the justice scales swing wider in your favour for those cases that you win.
In other words the innocent pay for the guilty.
Who ever said the law was supposed to be fair.

[Perry]

Contracts is what it is all about.
What is a contract. It is an offer and acceptance and that makes a binding contract.

I will certainly defer to your experience, given the Kangaroo Kourt decision.
That said, a contract has three components, as I understand it and all three
must be executed to create a contract.
* Offer
* Acceptance
* Consideration

So an offer can be made (the tenancy, by the LL)

The offer can be accepted (the tenancy, by the tenant)

But until money changes hands (the consideration), such
as the first weeks rent is offered by the tenant and ac-
cepted by the LL, no contract is created.

That's the way it was explained to me, anyway.

Maybe our legal eagles can add some insight?

[Keys]

My offers are conditional.

If the legal eagles are flying around and prepared to give comment then maybe the situation on conditional offers can be discussed.

[Ivan McIntosh]

Very simply, and in no way a substitute for getting legal advice on a specific transaction:

You can make an invitation to treat, for example:

I would be interested in discussing a lease of "x" property if you were able to front up with a WINZ rent bond and the first weeks rent. If that is on the cards, then call me.

If they do call you, you don't have a lease as yet, you've just agreed to talk to them about one. You'd need to do so in good faith as you've made them run around....I can imagine some vulnerability to an argument that you contracted to at least talk about it and the consideration was them arranging a WINZ bond and rent.

Or you can make a conditional offer, as Keys does....perhaps something like I will rent you x from such and such a date on condition that you first front up with a WINZ bond and a week's rent. That puts some power in the tenant's hands; it is up to them to satisfy the conditions, and if they do then they have a lease. Provided the conditions are what the landlord wants, everyone is happy and the tenant can expend effort knowing there is a payoff. You will need to have a date by which these conditions are to be met, and it would be important to have a lawyer run their eye over them to make sure the "conditions" aren't in fact written in such as way as to just be normal terms of a rental agreement subject to the Tenancy Tribunal's jurisdiction and various residential tenancy laws.

Perry, consideration can be many things, not just the payment of money. Incurring an obligation to pay rent is consideration, as is occupying the residence under the rental agreement. Neither party has necessarily yet exchanged money, but they are still bound by a valid contract. Your example, that neither is bound until the first weeks rent is offered and accepted, is unfortunately quite wrong.....the parties are bound from the moment they are signed up.

If I agree to sell you something in a month, and you accept, we are both bound despite no money having changed hands.

You can also contract with no consideration whatsoever by way of a signed & witnessed Deed.

Just as an aside, an example of a revocable contract, where there is no consideration, would be where there is a gift. While a gift can usually be revoked, you cannot do so if the receiver has altered their position in reliance on the gift. Eg you gift your neice money to go to university, they pay for their course fees, you have a falling out with them and demand your money back.....that's tough luck, you can't have it. However if the gift was just for any purpose and they'd simply put it in the bank, you could sucessfully sue for its return.......and be banned from the Xmas card list forever, no doubt.

[Perry]

OK - very tricky. Thanks, Ivan. Picking up on Keys' comment, and Glenn's
experience / observations, how then would a tenancy conditional offer /
invitation-to-treat be scribed? I'll have a try, to get the matter started,
utilising an approximation of what I use:

CONDITIONAL OFFER OF TENANCY

1. I have been offered the tenancy of the accommodation at xxxx.
I agree that, in order to be able to accept the offer, I shall, unless
otherwise agreed in writing, forthwith or in any event within one
working day of the time and date shown herein:

1.1 verify the chattels & fittings list and condition report for
the accommodation;
1.2 pay $150.00 security system deposit;
1.3 visit the offices of the PM's solicitors, (xxxxxxxxxxxxx) or
make an appointment to do so, to:
1.3.1 Execute the Tenancy Agreement and related documentation;
1.3.2 pay the first period’s rent;
1.3.3 deliver a completed bank automatic payment form;
1.3.4 pay the solicitor’s fee.

2. I have received a draft copy of the Tenancy Agreement to enable
me to seek advice on it if it is unclear as to what I will be agreeing
to. I agree that this offer is subject to a credit reference report
that is satisfactory to the PM/LL, even though I may have complied
with the other requirements herein.

3. I agree to complete all the tasks described in paragraph one hereof
within 1 working day of the offer made. I agree that should this not
be completed within 1 working day, this offer of tenancy to me will
lapse, without further notice.

How does that stack up? What else is needed? What is superfluous /
not needed / unenforceable / risky?

[Glenn]

Thanks Ivan. I have no training just lots of failures.

One aspect of the winz credit notes for some on the forum who might not be rolling in them.
Basically as soon as they are issued you can "normally" count on the money being put into your bank that night.
So my crime was I not only got two credit notes I got two lots of money for the one property.
Solomon offered to cut the baby in half.
The donkey starved to death when it was sat down between two bales of hay and could not decide which one to eat first.

[Winston001]

That said, a contract has three components, as I understand it and all three
must be executed to create a contract.
* Offer
* Acceptance
* Consideration

Correct as Ivan has comprehensively explained above.

You are correct that a contract requires consideration (value) but the passing of consideration (payment) is a distinct issue and may occur at a future point in time.

But until money changes hands (the consideration), such
as the first weeks rent is offered by the tenant and ac-
cepted by the LL, no contract is created.

No. Absolutely not.

You could express a contract in these terms and at the supermarket it is implied you pay before the exit door.

However if your contract specifies payment must be made and if not, then there is no contract, then you've lost all of your contractual rights to sue for breach. Can't sue for breach of a void contract.

Take my word for it - these subtle rules arising from conditions precedent and conditions subsequent and the entire question of whether a contract exists at all can cause many sleepless nights.

[td91]

WINZ bond works in a simple way, your prospective tenant takes in a letter from you outlining the move in costs. WINZ will grant it to the tenant providing they haven't gone over their advance payment limit (each client is entitled to a certain amount of money in advance in a 12 month period) once WINZ grant it the money appears in your account over night and all is done on that part.

Never draw up the agreement until you have received the funds from WINZ.

[Perry]

Don't WINZ want to see a copy of the TA, as opposed to simply a letter? I also
have the idea that WINZ require such LL or PM people to be 'registered' with
them as a supplier (or like expression), before they'll pay anything to them.